Enzon profit tops expectations

Revenue driven higher by sales of hepatitis treatment

By

TedGriffith

PISCATAWAY, N.J. (CBS.MW) -- Enzon's fiscal second-quarter profit more than quadrupled on the back of sharply higher sales of a hepatitis treatment, as the biotechnology company posted better-than-expected results Wednesday.

Enzon said net earnings surged to $8.6 million, or 20 cents per share, compared with $2.1 million, or 5 cents per share, in the year-ago period. Piscataway, N.J.-based Enzon had been expected to earn 18 cents per share, according to the average estimate of analysts polled by Thomson Financial/First Call.

Enzon said revenue soared 209 percent to $18.6 million from $6 million in the year-ago fiscal second quarter. The company attributed the rise to higher royalties from sales of Peg-Intron, which is marketed by pharmaceutical company Schering-Plough
SGP, -0.14%
as a treatment for hepatitis C, a virus that causes inflammation of the liver.

Shares of Enzon
ENZN, -4.35%
which had jumped Tuesday ahead of the report, closed down 46 cents to $50.66.

Although profits were up sharply, analyst Robert Parente at Leerink, Swann & Co. said some investors may have been disappointed that Enzon executives were reticent about their sales growth expectations during a conference call in the morning. Parente said it's difficult for the company to make forecasts because its partner Schering-Plough is responsible for marketing the drug.

The analyst also said there is some concern about whether the supply of Peg-Intron will keep pace with the strong demand.

"They've been able to meet a lot of the demand for right now, but it's something we continue to watch," Parente said.

"With Peg-Intron's impressive emergence onto the U.S. marketplace as the gold standard for treating hepatitis C and the enormous potential for continued market penetration, Enzon is well positioned to enjoy a consistent and expanding revenue stream in coming quarters," Higgins said.

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